Tesla’s profit falls in the second quarter

Tesla reported on Wednesday that second-quarter profit fell by nearly a third from the first quarter, as deliveries slowed due to shutdowns and raw material shortages at the automaker’s factory in Shanghai.

Profit for the quarter was $2.3 billion, Tesla said, compared with a record $3.3 billion in the first quarter. Sales fell to $16.9 billion from $18.8 billion in the first quarter.

The automaker was also hit by the sharp fall in the price of Bitcoin. Tesla announced in early 2021 that it has invested $1.5 billion in cryptocurrency. The company said on Wednesday that it had sold about 75 percent of its bitcoin holdings by the end of June.

Compared to the second quarter of 2021, the profit almost doubled. But because Tesla is a fast-growing company, investors are watching its progress, or lack thereof, more closely from quarter to quarter.

Tesla dominates the global electric car market and is growing, while traditional carmakers such as Toyota and General Motors are reporting sharp sales declines. But the last quarter was difficult.

Tesla’s vehicle deliveries fell 18 percent in the first three months of the year between April and June, an unusual decline for a company that has posted solid quarter-over-quarter profits in recent years. (Shipments were up 26 percent in the second quarter year-over-year.)

In China, which accounts for about 40 percent of Tesla’s sales, the company shut down a factory in Shanghai due to the pandemic and shortages of key parts and materials. Tesla was unable to ramp up production at new factories in Austin, Texas and near Berlin as planned.

Elon Musk, Tesla’s chief executive, told interviewers from the company’s fan club last month that the Austin and Berlin factories were a “money sink” that cost the company billions of dollars while producing few cars. Strengthening them and restoring normal operation of the Shanghai factory is Tesla’s top priority, he said.

Tesla said production in Shanghai resumed in June and the Berlin and Austin plants are making progress. “We are focused on record performance in the second half of 2022,” Tesla said in an earnings presentation.

The EV market is becoming more competitive, and traditional automakers are losing their lead to Tesla. Hyundai, Kia and Ford Motor have gained significant market share in electric vehicles, while Tesla has lost ground in the US. Tesla had a 66 percent share of the U.S. electric vehicle market at the end of the second quarter, according to figures compiled by Kelley Blue Book, down from 78 percent in the fourth quarter of 2021.

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